(764e) Gas to Olefins: Sustainable Development of Shale Gas?

The development of shale gas plays has received much recent attention due to their huge potential contribution to the United States economy. The economic output of shale gas is remarkable because a cheap and abundant supply of natural gas benefits not only direct industries that produce natural gas but also indirect industries that use natural gas to manufacture other products. The induced economic impact is also significant, as increased earnings correspond to increased expenditures, stimulating monetary circulation. However, the environmental issues associated with the shale gas development have raised extensive public concern. While it is true that extraction activities have increased the amount of greenhouse gases emitted to the atmosphere and that hydraulic fracturing requires extensive use and disposal of water, unconventional natural gas is nonetheless a much cleaner fuel as compared to coal and somewhat cleaner than petroleum-derived gasoline. Regulations at the federal and the state levels, in addition to proper management practices, should enable safe and reliable shale gas development.

A downstream opportunity of shale gas development that aims to meet growing worldwide propylene demand and supply shortage is Gas-to-Olefins (GTO) technology. This process consists of four stages: Syngas production, dimethyl ether (DME) production, hydrocarbon production from DME, and product fractionation.

In this presentation, we will outline our projection for the economic value of a plant which converts 100 million standard cubic feet of methane to polymer grade propylene (43.4% yield) and gasoline (3.5% yield). The annual production of propylene would be 440 thousand metric tons and the sales of the gasoline by-product would also generate revenue. A preliminary economic analysis for the proposed plant design showed that the total capital investment would be $462 million and the investment would accumulate $1.6 billion by the end of the 15 year plant life. The capital investment could be paid back in slightly over three years after startup and the internal rate of return was projected to be 22%. Reducing operating costs through more thorough plant optimization would make this project an even more promising investment opportunity.